Oklahoma Tourism and Recreation Department executive director Jerry Winchester, who had come under fire for the state agency’s controversial and now-terminated contract with Swadley’s Foggy Bottom Kitchen, has resigned, according to Gov. Kevin Stitt. During a five-minute press conference this afternoon where neither he nor Lt. Gov. Matt Pinnell answered questions, Stitt also announced a state lawsuit against the Swadley’s company.
“We are committed to getting to the bottom of this. There are a lot of different investigations going on right now,” Stitt said. “And I think we can all agree that the most important things are protecting the taxpayers and shining the light on any corruption and any bad actors.”
Winchester’s resignation comes one day after leaders of the House of Representatives announced the formation of a special investigative committee, which will hold hearings on the dealings between OTRD and Swadley’s. The company has been accused of inflating invoices for state reimbursement, and questions continue to linger about the bidding process by which Swadley’s won the contract to renovate and operate state park restaurants.
The committee — a 15-member bipartisan group chaired by Rep. Ryan Martinez (R-Edmond) — could begin holding those hearings in May, as lawmakers determine the agency’s budget for next fiscal year.
Martinez said Thursday that he was “surprised” Winchester remained as director of the agency. That changed 24 hours later, when Winchester sent Stitt a resignation letter.
“I regret that in the best interest of the department, I feel it necessary to resign as executive director of the Oklahoma Tourism & Recreation Department effective immediately. I don’t want my continued involvement to overshadow the great accomplishments that have been achieved these past three years,” Winchester wrote in a letter to Stitt. “I am confident that the current audits will reveal that the department has been acting in the best interests of the state and we will fully cooperate to ensure a swift resolution. We have assembled a great group of professionals that seek not only to tell the unique story of our state, but to improve the park system to a level our citizens and visitors deserve. Thank you for the opportunity to serve the state of Oklahoma and to have been a part of all the good things you have accomplished.”
State files breach of contract lawsuit against Swadley’s
The lawsuit filed Friday by the state of Oklahoma against Swadley’s Foggy Bottom Kitchen LLC alleges a “breach of contract” by the company. Filed on behalf of the state by private attorneys Randall Calvert and Andrew Davis, the petition is embedded below.
“Under the terms of the contract, defendant has the duty and obligation to make its financial books, records, and documents available to plaintiff at all reasonable times. Under the terms of the contract, defendant has the duty and obligation to have its financial statements audited annually and delivered with the audit report to plaintiff,” the petition states. “Plaintiff has repeatedly requested that defendant make its financial statements, books, records, reports, and such documents available for examination by plaintiff. Plaintiff’s requests are reasonable and necessary not only because plaintiff is contractually entitled to such information and documents but also to ascertain the accuracy of defendant’s record keeping and reconcile all monies paid or owed to plaintiff.”
The petition calls Swadley’s actions “reckless.”
“Defendant has violated its promises and obligations and is in material breach of the contract and has failed and refused to provide an accounting to plaintiff,” the petition states. “As a result of defendant’s knowing, reckless, and willful refusal to comply with its obligations and to provide an accounting, plaintiff has been damaged. Plaintiff is entitled to a full and complete accounting from defendant.”
Stitt referenced the lawsuit in his brief press conference.
“We intend to protect the taxpayers by any and every means necessary,” Stitt said.
Stitt also referenced reported comments allegedly made by Swadley regarding the governor.
“My team keeps getting asked about comments that Brent Swadley has made. Let me be clear, I do not have any sort of relationship with Brent Swadley. I don’t know Brent Swadley. I have no involvement in this contract,” Stitt said. “It’s troubling to me to see someone using the governor’s name to manipulate the system or to try to get their way.”
Stitt said Pinnell, his secretary of tourism and recreation, will take “an even more involved role” with OTRD and that he will coordinate with the Legislature for its investigatory committee.
“I want everyone to know — the 3.9 million people in the state of Oklahoma — that we are going to continue to lead this agency with humility, clarity and courage,” Pinnell said.
Stitt said the lawsuit and ongoing investigations into the Swadley’s contract would prevent either he or Pinnell from taking questions, and the two elected officials walked out of their own press conference as reporters asked about the situation.
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Swadley’s contract canceled Monday
Questions remain in regards to how the Tourism Department selected Swadley’s for the contract, which guaranteed coverage of operating losses. The state has paid the restaurant chain about $17 million in reimbursements and capital improvements, some invoices for which have been questioned as appearing to be inflated.
OTRD canceled its contract with Swadley’s on Monday. The contract between the state agency and restaurant chain began March 4, 2020.
In Winchester’s Monday letter — addressed to Brent Swadley to notify him of the contract’s cancellation — Winchester wrote that the cancellation was “due to suspected fraudulent activity found through highly questionable billing, invoicing, and record keeping practices which the department has been investigating for the past several months.”
Winchester’s letter gave Swadley’s until Wednesday to shut down its operations at its six state park locations.
A separate investigation that was requested in late March by Oklahoma County District Attorney David Prater into the now-terminated contract is also ongoing. Additionally, Prater asked State Auditor and Inspector Cindy Byrd to conduct an audit regarding allegations that the barbecue company inflated reimbursement invoices to the Tourism Department.
Shortly before Stitt and Pinnell’s press conference Friday, a public relations firm sent a statement on behalf of Swadley’s Foggy Bottom Kitchen, which is owned by Brent Swadley:
Swadley’s is proud of the work it has done in Oklahoma’s beautiful state parks. As part of an effort to modernize those parks, Swadley’s entered into a contract with the Oklahoma State Tourism Department in March of 2020 to redesign, rebuild, and revitalize six restaurants on state park properties. Despite the logistical complexities presented by the location of these restaurant sites, Swadley’s completed its work on the six restaurants in less than two years.
From the beginning, Swadley’s acknowledged and accepted that this project would be a difficult undertaking, but the extent of the decay and neglect at the various restaurants made it more difficult than either party initially anticipated. For example, when Swadley’s employees went to conduct an initial assessment of the work needed at Robbers Cave State Park near Wilburton, park personnel provided Swadley’s staff with a case (not a can) of wasp spray so they could safely enter the dilapidated property. Because of the years of neglect causing mold and substantial decay to mechanical systems, the Robbers Cave State Park restaurant was in such bad shape that it required an unanticipated total rebuild.
Another unfortunate complication was the COVID-19 pandemic, which increased costs of labor and raw materials during this project and was accompanied by restrictions on indoor dining and a general decrease in restaurant traffic. Despite these immense challenges, Swadley’s completed and opened restaurants at Lake Murray, Beavers Bend, Quartz Mountain, Robbers Cave, Sequoyah, and Roman Nose. The ‘before and after’ pictures speak for themselves (see attached).
Swadley’s is proud of the hard work of our employees, which brought the amenities at these state parks in line with the breathtaking natural beauty our great state has to offer. Swadley’s leadership team is disappointed by the recent decision to terminate its contract, and heartbroken for the hundreds of employees whose livelihoods are directly impacted.